A massive 40 per cent of properties withdrew from the weekend’s auction market after an on-site auction ban to beat coronavirus, but a third were sold prior, with the clearance now below pre-Federal Election as millions of dollars in sales went ahead online.
The latest CoreLogic market activity update said 3,203 homes were originally scheduled for auction across the combined capital cities, the highest level so far this year, but that changed immediately after the Prime Minister’s ban was announced mid-week.
“With the COVID-19 disruption of new policies preventing on-site auctions, the auction withdrawal rate surged over the weekend, with 40 per cent of auctions pulled from the market, up from 7.5 per cent a week earlier,” CoreLogic said.
Sellers also accepted a greater number of offers put to them beforehand, with the proportion of properties sold prior to auction rising from 22 per cent last week to 36 per cent this week. “There are likely to be a range of reasons for more auctions selling prior to the scheduled date, including auctions that were brought forward to beat the ban and vendors motivated to offload their property before lock down policies potentially escalate.”
Among properties that sold via online auction platforms over the weekend was 5 St George Court, Wishart, listed by Henry Wong of Harcourts Beyond – Brisbane, which sold for $1.098m.
Harcourts Queensland cheif auctioneer Christian Hamilton expected the takeup of online auctions to rise to the point where they would be maintained even after the coronavirus measures were lifted.
“From everything I’ve experienced it’s been a really great update. We’ve transitoned very seamlessly. To be honest I think this is the way we will conduct auctions in the future. I’d like to keep this around. All of our agents have embraced it.”
The Wishart property saw seven bidders register, with 44 bids cast from five of them, ”It sold well above reserve, nearly $50,000,” Mr Hamilton said. “It was a really good process. It took about 35 minutes, 10 minute negotiaton and around 20 minute auction. It does take a little bit longer, you’ve got to relay information over the phone. We take a bit of extra time so everyone knows what’s going on and they have equal opportunity, We do expect all our auctions to run a little bit longer but that’s okay, it’s well wortth it.”
CoreLogic said the surge in withdrawn auctions was anticipated, with the shift towards remote auctions expected to “take some time for the market to adjust to”, with more transitioning to private treaty sales, and some even sitting tight off market until conditions improved.
“The auctions that proceed will likely utilise digital platforms such as Gavl or AuctionNow as well as proprietary platforms from the major real estate groups. Overall, we are expecting a substantial drop in new property listings, regardless of the selling method, as buyers and sellers retreat to the sidelines and wait for some certainty to return to their decision making.”
The changes pushed the national preliminary auction clearance rate down to 51.4 per cent, the lowest it’s been since June last year, though it was still higher than the same weekend in 2019. Brisbane saw its level drop one percentage point below the same time last year to 32.5 per cent.
The data firm expected that as more results came in, the number of withdrawn auctions would rise and the final clearance rate would drop further.